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TMI Blog2008 (2) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... able u/s. 43B of the Act ? (3)Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the bank guarantee furnished by the assessee which was taken by the assessee by depositing certain amount in bank fixed deposit as margin money did not tantamount to actual payment and so section 43B is applicable?" 2. The Assessment Year is 1987-88 and the relevant accounting period is year ended on 08.07.1986 (Ashadh Sud Bij). The assessee, a Private Limited Company declared total income of Rs.1,08,320/-. The Assessing Officer framed assessment at a total taxable income of Rs. 17,57,329/- u/s.143(3) of the Act vide assessment order dated 30.03.1990. In the course of framing the assessment order additions were made in relation to six different items referred to in paragraph Nos. 2 to 7 of the assessment order totaling to Rs.21,75,688/-. The assessee carried the matter in Appeal before the Commissioner (Appeals) challenging the aforesaid six items of additions and also objected to interest levied under sections 139 and 217 of the Act. 3. After hearing the representative of the assessee vide order dated 05.02.1992 the Commissioner (Appeals) passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the order made u/s. 154 of the Act on 08.04.1994. As the order u/s. 154 of the Act was not available on record, the learned Advocate for the assessee was permitted to place the same on record with the consent of the other side. 6. The assessee carried the matter in Appeal before the Commissioner (Appeals) and one of the principal ground of challenge was regarding jurisdiction of the Assessing Officer to bring to tax an amount of excise duty collected but not paid by invoking provisions of section 43B of the Act. The Commissioner (Appeals) vide order dated 25.01.1995 rejected the contention regarding absence of jurisdiction in so far as the Assessing Officer is concerned by holding that there was no specific direction and the assessment was set aside to be reframed afresh in totality. 7. The assessee carried the matter in Second Appeal before the Tribunal once again raising the issue relating to jurisdiction of the Assessing Officer. The Tribunal vide order dated 19.10.1995 upheld the order of Commissioner (Appeals) by holding that the entire assessment was set aside and the entire assessment stood open before the Assessing Officer. That the Assessing Officer was not only fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to point out that there was no dispute that Commissioner (Appeals) was entitled to set aside the assessment order and refer the case back to the Assessing Officer for making a fresh assessment in accordance with the directions given by Commissioner (Appeals). That in absence of any directions being given by Commissioner (Appeals) the Assessing Officer was entitled to reframe the assessment afresh in totality considering that the set aside was an open set aside and not a conditional or a limited set aside. That the latter part of section 251(1)(a) of the Act provided that the Assessing Officer was duty bound to proceed to make such fresh assessment and determine the tax payable on the basis of such fresh assessment and therefore bearing in mind the scheme of the Act, with special reference to Sections 4 and 14 of the Act no interference was called for. In support of the submissions reliance was placed on the following decisions : (1) CIT Vs. McMillan & Co. (1958) 33 ITR 182 (SC). (2) CIT Vs. Seth Manicklal Fomra (1975) 99 ITR 470. (3) CIT Vs. T.T. Krishnamachari And Co. (1997) 223 ITR 224. (4) Smt. Vijaykunverba Vs. CIT (1994) 208 ITR 312 (Guj.) (5) State of Andhra Pradesh Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellate Assistant Commissioner [or, as the case may be, the Commissioner (Appeals)] by the appellant". 13. On a plain reading of the aforesaid provisions it becomes apparent that the Appellate Authority is entitled to either confirm, reduce, enhance or annul the assessment; or the Appellate Authority may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment in accordance with the directions given by the Appellate Authority after making such further inquiry as may be necessary, and the Assessing Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment. Thus, the section, or more specifically the clause stipulates confirmation, reduction, enhancement or annulment of the assessment. Alternatively, the section envisages setting aside of assessment and referring the case back to the Assessing Officer for making a fresh assessment in accordance with the directions given, and such fresh assessment may either result in some tax becoming payable or there may be a situation where tax may not be payable on the basis of such fresh assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 251(2) of the Act. 15. Similarly even where an assessment is set aside simpliciter, without any enhancement proposal, it is always in context of the appeal against an order of assessment and cannot be read to mean that the Appellate Authority granted powers to the Assessing Officer in relation to items of assessment which were never forming part of Appeal before the Appellate Authority. At the cost of repetition it is required to be noted that processing a new source of income which was on the record before the Assessing Officer but is not forming part of subject matter of appeal before the Appellate Authority can be undertaken by the Appellate Authority only in the course of enhancement of the assessment and therefore any set aside, which does not involve a proposal for enhancement, cannot be used for the purpose of expanding the scope of the powers available to the Assessing Officer while making fresh assessment pursuant to a set aside. 16. Consistently the Courts have held that the powers available to an Appellate Authority are co-extensive and co-terminus with that of the assessing authority and though such powers are plenary powers, yet the Appellate Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Assistant Commissioner has considered the amount of remittance of Rs.5,85,000 from a different aspect, namely, the point of view of its taxability. But since the Income-tax Officer has not applied his mind to the question of taxability or non-taxability of the amount of Rs.5,85,000 the Appellate Assistant Commissioner had no jurisdiction in the circumstances of the present case to enhance the taxable income of the assessee on the basis of this amount of Rs.5,85,000 or of any portion thereof. As we have already stated, it is not open to the Appellate Assistant Commissioner to travel outside the record, i.e., the return made by the assessee or the assessment order of the Income-tax Officer with a view to find out new sources of income and the power of enhancement under section 31(3) of the Act is restricted to the source of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability. In this context "consideration" does not mean "incidental" or "collateral" examination of any matter by the Income-tax Officer in the process of assessment. There must be something in the assessment order to show that the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence powers u/s. 251 of the Act granted to an Appellate Authority cannot be used to render other provisions of the Act like sections 154, 147, 263 and 264 of the Act otiose or redundant. 19. Applying the aforesaid tests to the facts on hand it becomes apparent that when the assessment order was originally framed the Assessing Officer had not considered the issue as regards taxability or non taxability of excise duty collected in context of provisions of section 43B of the Act. The assessment order was silent in this regard. The assessee had only challenged six items of additions before Commissioner (Appeals) along with charging of interest under sections 139 & 217 of the Act. Therefore, when Commissioner (Appeals) framed the order on 05.02.1992 the set aside that was envisaged was in context of the additions or disallowances which were in appeal. The grievance voiced on behalf of the assessee before Commissioner (Appeals) was that considering the facts which could be verified no addition or disallowance was called for, the additions and disallowance were made in an arbitrary manner without adducing any evidence in support of such additions or disallowance, the same have been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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